For some time, rumor had it that Oracle
The price tag is $13.50 per share, or $440 million in cash. That's a nice 27% premium to Stellent's current share price; as recently as June, the stock was trading around $9.
Stellent's strong ECM offering allows customers to manage all phases of content's life cycle -- the creation, approval, publishing, searching, and archiving of content. This helps companies improve their analysis and decision-making, while enabling better compliance with regulations such as Sarbanes-Oxley for corporate governance, the Health Insurance Portability and Accountability Act, and others. Stellent has recently begun venturing into cutting-edge approaches, such as enterprise blogs and wikis (which allow for project management).
In terms of the fundamentals, Stellent's business is growing at a decent pace. In the second quarter, revenues increased 12% to $33.7 million and net income increased 139% to $1.3 million, or $0.04 per share.
In fact, over the years, Oracle has tried to build its own ECM system, but the results have been lackluster. The company has made a good choice with Stellent, which not only has strong technology but also an extensive base of 4,700 customers. Its marquee customers include Home Depot
Better still, Oracle didn't pay an excessive price for Stellent. The enterprise value of the company is roughly $345 million (subtracting the company's $95 million in liquid assets from its market cap). The resulting multiple of 2.4 times revenues is in the sweet spot of other deals, such as IBM's
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